Pueblo County braces for millions in revenue loss if Comanche 3 power plant closes
Pueblo County Commissioners discussed the possible loss of $15 million in revenue that could result if Xcel Energy’s Comanche 3 Power Plant is forced to close.
“Comanche 3 is the only coal-fired plant in the state of Colorado” that has not been earmarked for closure, said Garrison Ortiz, commission chair. “I think for many reasons it is a little bit of a target right now for closure.”
Ortiz said he and other commissioners have heard some chatter and general news that the plant is the focus of some political and environmental groups.
Xcel will present an electric resource plan to the Colorado Public Utilities Commission next month that "will present the resources needed to meet customer demand and achieve at least an 80 percent carbon reduction from 2005 levels," said Michelle Aguayo, Xcel media relations representative.
Aguayo said Comanche 3 serves an important role in energy supply stability and reliability when other generation resources are not sufficient to meet demand.
"Just this week, it was a valuable resource providing support not just to our customers in Colorado, but the entire region as we all managed the record-breaking cold. We also recognize the economic importance of the facility to the community of Pueblo and our employees," she said.
Ortiz said the county already had similar concerns a couple years ago following the closure of the Comanche 1 and 2 plants. That concern caused county officials to hold off on the first issuance of debt.
“I think on the surface for any community that has any plant of that magnitude you obviously have an immediate job loss and loss of a huge property tax base,” Ortiz said. “What further complicates things here is the fact that our 2016 De-Bruce ballot measure, which contains 20-plus capitol improvement projects such as the Historic Arkansas River Project extension, the Runyon Field expansion, the Joe Martinez expansion and just on down the list, that is intimately tied to that property tax revenue stream coming from the Comanche 3.
"In fact, I believe that it constitutes about 60 percent of our repayment source for that debt,” he explained.
Ortiz said most of those projects have now moved through the phase of initial design and “it is time to get to construction. If Comanche 3 were forced to shut down prematurely, that affects our second (debt) issuance in a huge way.
"Most of the debt issuances run for 20-year terms.
“So if that (power plant) were to shut down before 2040, we have some real issue of concern. Not to mention that there is about 100-plus well-paying jobs — I think the average is about 80,000 a year — and these are the jobs that we want that bring up our workforce and help people stay and remain in Pueblo County,” Ortiz explained.
The closure would not just affect Pueblo County but also the library district, school district, the city of Pueblo and even the Lower Arkansas River Valley as well as others that “receive annually over $15 million a year. These are just preliminary figures of what it means to us economically,” Ortiz said.
Pueblo County Budget and Finance Director Ashley Huggins is putting together a financial analysis to show the commission what the closure consequences could be financially. Ortiz said that evaluation is focusing on whether the county should move forward with the projects.
Ortiz said the county would like to take advantage of low interest rates because it is such an opportune time to do a second tranche of debt issuance. He indicated the county recently refinanced an older debt and "that saved us over $600,000 a year" because of the low interest rates.
The county determined the need for specialized legal services of an energy attorney. Frances Koncilja will be officially serving in that capacity after the commission ratified a contract for her Tuesday.
“When the stakes are high — and I think you can tell just from preliminary figures — the stakes couldn’t be higher right now for Pueblo County. You need to go out and hire the very best, top-caliber resources you can possibly find.
“I could not be any more eager to get her on board and appreciate her work and advocacy on behalf of Pueblo County,” Ortiz said.
Xcel Energy’s 1,410 megawatt Comanche 3 Power Plant opened in 2010 and features advanced emission controls.
Chieftain reporter Tracy Harmon covers business and Fremont County news. She can be reached by email at email@example.com or via Twitter at twitter.com/tracywumps.